Wholesaling real estate is always introduced as the most effective way to enter into the real estate industry. This has been debated by many professionals and both sides have made great points for and against it. If do decide to incorporate wholesaling as the strategy to enter into the industry, you will have to be proficient in marketing.
So let’s discuss one of the key components of marketing, which is direct mail. There are some misconceptions about direct mail, and there are some proven techniques that work. I would like to discuss some of the strategies to incorporate when using direct mail as a marketing source.
I wrote an article some time ago about direct mail, and I want to reiterate some of those points and add to it.
If you have been researching wholesaling at all, you may have read a few things you need to do in order to be successful, such as being consistent, following up, learning to negotiate, building rapport, and marketing. All of these are key in wholesaling, but marketing in the most basic element that you will need to learn in order to have any level of success. So let’s dive in to direct mail marketing.
How to Invest in Real Estate While Working a Full-Time Job
Many investors think that they need to quit their job to get started in real estate. Not true! Many investors successfully build large portfolios over the years while enjoying the stability of their full-time job. If that’s something you are interested in, then this investor’s story of how he built a real estate business while keeping his 9-5 might be helpful.
Budget, List, Mailing Piece, Frequency
With direct mail marketing, it is important to focus on your budget, your list or target audience, your mail piece, and your mailing frequency.
The key to direct mail marketing is consistency, and having a realistic budget will help set a clear and concise plan. With direct mail, it is a number’s game, and the more you can do, the more opportunities you will have to speak with sellers and close deals.
One of the biggest mistakes investors make is to try and do too much in a small period of time. What I mean by this is instead of sending multiple smaller batches of mail, an investor will send the entire batch of mail and then have no money for the next month. For example, if you have the budget to send 2,000 mailers, it is better to send multiple batches of 500 over a period of time versus sending all 2,000 at once. It is good to set a budget for 6 consecutive months of mailers.
Once you have a solid budget, obtaining a mailing list is the next step in creating a direct mail campaign. Before pulling a list, you need to outline a target audience because your message will need to appeal to that audience. There are numerous lists to use. Here are a few:
- Absentee Owners In-State
- Absentee Owners Out-of-State
- Notice of Sale
- Tax Defaults
There are many other ways to create a specific list, such as by pulling according to a certain zip code, a certain age, or a mortgage origination date (high equity). It is very important to make sure your list is targeted and focused. One major mistake people make is generating a list that covers a large geographical area. This is basically the “spray and pray” method of direct mail, which is not good when you have a limited budget.
Targeting Quality Leads
So where do you find a list that provide quality leads? I provided numerous resources you can use in my previous article “8 New Killer Resources for Savvy Low-Budget Wholesalers.” I will not discuss these resources now because this information is provided in the prior article.
Related: Newbies, Want to Succeed at Wholesaling? Focus on Finding Deals! Here’s How.
One of the biggest questions that is asked about direct mail is, “Which list to mail to?” My most productive list is the divorce list. This list is highly responsive and motivated; however, it is important to mail to multiple list at multiple times. The divorce list happens to be my most productive list, but at times, other list produce just as well.
I am not opposed to the absentee owner list, but with this list, there is much more competition. I am not one to have a scarcity mentality, but absentee owners receive a lot more mail, and a lot more people are targeting those lists.
Getting Your Message & Presentation Right
A very common mistake made is in the actual message. The message need to appeal to the audience. The mistake I’m referring to is where everyone uses the same verbiage in their letter or postcard no matter who the audience is. This is a mistake because the problem a landlord faces is not the same problem a probate executor has or the same problem as a person behind on their taxes. The needs and the desires are different, and so your message should be different too. It is important to discuss in the body of the message how you can assist in solving their problem. You have to be a problem solver.
One part of direct mail that is often overlooked is the envelope. Your message can be perfect and it can solve every problem the seller faces, but if the envelope does not gather the attention of the reader, then your message is useless. The envelope has to make the receiver want to open the envelope. This includes what type of stamp you use, whether the envelope is handwritten, and the color of the envelope. All of this may seem overwhelming, but it is important to try different things and to test continuously to see what is effective.
In closing, direct mail is a great way to get your phone to ring, but there is a science behind marketing, and having a responsive mail piece along with a motivated list is the foundation.
Wholesalers: What kind of success have you seen with your direct mailings?
Leave your questions and comments below!